tv Your Business MSNBC August 1, 2010 7:30am-8:00am EDT
>> hi there, everyone. welcome to "your business" where we give you tips and advice to help your business grow. selling stolen goods. sounds a bit shady. for one entrepreneur, he's done it on the up and up with, if you can believe it, the support of the local police. >> there's something a little bit naughty about buying stolen goods on the internet. it's crazy. i don't know what to tell you but there's a lot of enthusiasm. >> believe it or not, part of that enthusiasm comes from the police department. >> we don't have the resources for that. >> by that long beach police commissioner means dealing with all of the property police
officers recover in the line of duty. everything from jewelry to baseball bats to bicycles. >> if you can think of it, we're probably come across it. >> while the police officers see this stuff as a burden -- >> a lot of times property itself sat on a shelf and collected dust and created clutter and it just bogged down the whole system. >> tom saw it as an opportunity. >> i know that police departments had to auction it off. they try to give it back to rightful owner. by law they have to auction it off. only way they could do that was run a local auction and haul this stuff out into the parking lot and hope it didn't rain and have an auction. >> a former long beach police officer knew that dealing with stolen property was taking up the police department's valuable time and resources. >> property coming in is easy. voucher it in. you put it in a certain bin in the property room.
that's the easy part. disposing of it and tracking it is the more difficult part. and it's really an additional duty. it probably takes one or two full-time people just to deal with property. >> lane seized the opportunity to ease that strain by launching a website. >> finding a solution. >> the company takes items cluttering property room around the country and auctions them off online. >> it wouldn't have been possible without the internet. we have 1.5 million registered users on our site and we opened to a bigger marketplace and more consumers and enables the price to go up. >> having control of the inventory is key to property room strategy. the company can limit the number and variety of items on the site at any time. unlike other websites, only u.s. residents can bid. >> this product is sitting there. we control the inventory.
as a detective hi to clean up the property room. >> right now about 2,000 agencies in 47 states send property to lane's company. >> same service at the three-man to department as the new york city police department. trucks come on a regular basis. pick items up. process them through facilities and auction them off and get them a check. >> the amount of money depends on the price of the final sale. >> no department we're doing business with has failed to double the revenue they used to get from the old way. >> we can track the item on the web. see where it's getting auctioned. see what the bids are and we get a check within days. items have been auctioned off that we thought had little or no value and we got 600 dollars for them. >> the relationship with property room allows officers to stay focused on the real task at hand. >> it's a substantial amount of
time and manpower. it's tough to put a number or dollar amount on that. it does free up officers and detectives where normally we would have to maintain this property. >> in a time when budgets are being cut, the money from online auctions has allowed long beach to invest in additional resources. in fact, one purchase has already saved a life. >> we purchased through monies we got from propertyroom.com, a rescue mask that shoots a life preserver 300 feet into the water and inflates. >> lane is clear about what we'll put for sale on the site. nothing illegal but there are some, shall we say, unique items. >> we had a colonoscopy machine. we sold it. >> i'm in the l.a. warehouse one day and there's a coffin in the middle of the floor. guys, what is this? somebody stole a coffin.
right away you think who is going to bid on a coffin? who will bid? and then a week later someone wins and picks it up. >> in the past few years the company has seen its profits rise. >> the economy goes into the tank and we have our first profitable year ever. part of it is we got a lot of people looking for bargains on the website. >> advertising has been somewhat of a bargain with no tradition ads, the company's clients have been its best marketing tool. >> a police department is thinking of doing business with us will call the police department next door or 45 minutes away and say what do you think of these guys? they're our best sale people. >> with a nearly perfect sales record, the mission is the same. property room will remember how it got its start. >> we take care of law enforcement clients and they take care of us. we take care of consumers and they trust us and keep coming back. >> that was a perfect example of somebody who started a business
who solve a problem. so let's turn to this week's board of directors to talk more about it. rita is the ceo of grow biz media and a columnist at all business.com and rod is the executive director of aol small business. >> co-cons spirpirators here. >> i love this story. it's so obvious to this guy who was in the police department. he saw a problem and said here's something i can do something about. and it was brilliant. he knew the ins and outs. for people starting small businesses, they want to start something. often times they need to look around. >> exactly. if you have a job, you're doing something, you know that there are thing that are not working right. if you can find a solution for it, you have a business and you probably have your first customer and that's really key to getting you off the ground. >> i love these build a better mouse trap companies. people who have firsthand experience with what's being
done wrong in an industry and come in with a new idea and revolutionize it. it was a fun piece. we were joking that we want to check out the site. great stuff. >> you wanted the colon -- >> maybe the coffin. >> the other thing that was neat is clients are best marketing tool and how they spread the word to other police departments but i thought there are or could be a good marketing tool to get users to the site. >> you know what? if you think about it, the money is going back to the police department so they should play up that civic angle in terms of getting customers. if you come and you shop here, you're not only getting something you want and getting a good price, but you are giving back to your community at the same time. >> at the beginning one of the guys said there's something naughty about it. it does have that mystique for certain customers. others who might be turned off by the idea of something stolen. maybe there's something wrong with it. i don't know the history.
i would be curious to what they have to say about fighting that stigma that might come for some customers because that could limit how wide they open up their user base. >> the police department deals with so many people on a day-to-day basis that to get them to get the word out and then you don't have to use any of your own dollars to market. >> exactly. i also think that it's a very good time to do auction based stuff. people who are looking for the bargain. you are satisfying the customer and people in the community and doing good deeds at the same time. >> there seemed to be a lot of auction based sites popping up these days. >> the web is really flattened the earth that you can take an idea and reach customers across the country or around the world. i think it's sort of drifting into these real specialty auction sites because people don't want to necessarily navigate the universe of ebay. they want to go where they are looking for one particular thing. >> when i first heard about this, i thought why don't police departments get someone like i
sold it on ebay to sell it on ebay but this works better. they can keep track. >> i think when consumer hears the word auction they think value, bargain. get something for less. >> new yorkers love bargains. >> thanks you guys. >> legislation that could have helped small business owner get loans was the victim of political wrangling. the president met with local entrepreneurs in a sandwich shop this week. >> small businesses create two out of every three jobs in this country so recovery depends on them. if we want to keep american moving forward, we need to keep investing in our small businesses. >> the bill stalled in the senate when republicans and democrats couldn't agree on amendments to the legislation. it would have earmarked $30 billion to get to community banks. banks that many small businesses depend on for loans.
this week we decided to take another look at community banks and how they can help fund your business. >> in the town of westwood, new jersey, family owned businesses are the foundation of this close knit community. >> we've been through good times and bad times together. >> debbie is the cfo of a kitchen and appliance center started by her grandfather in 1951. >> it could go on our site and go to manufacturers links. >> the business relies heavily on deals with contractors who install appliances in new homes. when the housing market collapsed, her business was decimated. >> it started to chip 10%, 20%, luxury market fell 40%. budgets are cut and instead of getting paid in 30 days you get paid in seven or eight months. what do you do? >> oberg went the only one
struggling to make ends meet in this difficult economic climate. lee owns the iron horse, a local landmark. in recent years he witnessed a dramatic change in his customers eating and drinking habits. >> used to be if you put a $20 bill on the bar in 1973 you could drink for two nights. now it is two glasses of wine and a tip and you are done. >> lee needed a line of credit to add a takeout component to his business. he knew a commercial bank was out of the question. >> they would have looked at that time and gone, no. these people are losing money every year. we're not about to throw our money down the drain. >> debbie needed bridge funding to help cover payroll and expenses while she waited on receivables. >> we needed to bridge the gap to be able to afford salaries. >> they both turned to paskack community bank. a successful lawyer and real estate mogul grew up in the town and he's known debbie and lee for more than 20 years. >> a community bank will service
95% to 98% of the average person's needs. >> the vast majority of community banks are well capitalized and have plenty of liquidity and are willing to lend. the community banks stick with their customers in good times and in bad. >> the bank which counts local businesses and residents as shareholders provide services to people in the community, something large commercial banks can't always offer. >> the phrase used most often is know your customer. it's difficult if you're a large institution to know the local grocery store, the local appliance store, the local restaurants. >> community banks also look for character and that's one thing that they look to. they are within the community itself. they want to help the community. >> i'm familiar with their businesses. when i go into lee's business on a friday or saturday night and i see a busy or not busy, i understand whether he's doing well or not. when i visit debbie's appliance store to buy a washing machine
on a saturday, i see customers in there. >> everyone in that bank at the decision making department knew who we were and knew our establishment and knew how important we were to the community and what volume we're doing and all we had to do was tweak a little here and tweak a little there to bring profitability back online because our customer count never dwindled. >> community banks aren't immune to the ailing economy but under a watchful eye, the community bank stayed away from speculative real estate investments and mortgages that have crippled banks of all sizes. lee and debbie both received support providing a much needed boost to their businesses. lee now does all of his banking there. >> our payroll goes through them. our credit cards are direct deposit into them. >> while debbie oberg does business with a local commercial bank, both business people have found pascack a community bank
to be valuable at these times. >> i could call him at 1:00 in the morning and talk to him. >> their success is how well they do with their community here. >> it's a win-win. if we don't do well, they don't do well. >> with the economic outlook still uncertain, small business owners have to do everything they can to stay afloat. here are five tips to manage your company through difficult times courtesy of entrepreneur.com. number one, prepare your staff for the future. if you are in a slow period, cross train people so they are ready to handle new tasks when business picks up. two, look for creative ways to hold onto your best people. this may require open communication about the company's current challenges. three, create a rewards program for referrals. they can be a good way to bring in new clients. four, if you are a service based
business, consider your pricing and make sure it is tied to defined levels of service. number five, if you do have cash to spare, look at your competition. a down economy can be a time to acquire competitors who are struggling. >> when we return, we'll answer your with small business questions including from a 19-year-old entrepreneur. and getting protection from bullets and body odor. a vested interest in law enforcement's personal hygiene. [trumpet playing "reveille" throughout]
in the business of making sure people who law enforcement are protected while they serve. let's see what the panel thinks. >> morning. >> morning. >> hi. >> we own armor pure patent pending. >> i became alarmed by how many of my fellow officers were not wearing their bulletproof vests because it smelled so bad. we found this totally unacceptable and felt there had to be a better way. >> armor pure is the better way. lab tests prove it beats the competition and our experience prove armor pure sells itself. on the spray take it and spray the inside of your vest. let it dry overnight. armor pure is bleach free and unlike competition it doesn't just cover up odor but targets the cause of odor. >> i understand our consumers needs because i am that consumer. our policy is excellent customer service and a 100% money-back guarantee. >> and in just ten months we have strengthened the armor pure name brand and steady online
sales. in order to tap into other markets we're asking for $1.5 million for a 30% return. >> remember, body armor stinks so they need armor pure. >> your commercial is done. you guys are good pitching team. >> my opinion doesn't count. it's your opinion that does. i'll start with you. did they get everything in there? >> i think they did. it was a great pitch. we've been riding this elevator for four years now. never felt safer. i thought this was a great pitch because you complemented each other well. i like as far as product goes and company goes, i like that you have credibility of being in law enforcement and really knowing the need for this. i thought it was great. >> i thought the pitch was really good. i just kind of want to know who are you selling it to right now? where do you plan to expand? what other markets are you going target? >> that's something you should put in the next pitch. >> would you take another meeting? >> i would love to i'd love to they're going to sell this, how this might be different than
something currently on the market, febreze, that kichnd of thing, so you might want to research what the competition is going to say. >> it's good to have the personality of someone that people would want to work with. thank you so much, guys. thank you for your advice here in the elevator. and if any of you out there have a product or service and you want feedback from our elevator pitch channel of your chance of getting investors, just send us an e-mail. the address is email@example.com. in there include the product, how much money you're trying to raise and what you're intending to do with that money. you never know, someone out there may have interest in helping you. it's time now to answer some of your business questions. receipt rita and rob are back with us
again. chloe writes, i am a 19-year-old first-time entrepreneur. my question is regarding private lenders what interest rate would i offer? >> in if you're looking for a start-up loan, a lot of people go to friends and family, of course, or they go to their credit cards which are relatively higher than 15%. >> a friend of mine owns multifunding.com, and he says the going rate for private lending is between 12 and 20% and a lot of times people are asking for points up front, too. it's hard to get money these days, so i think there is a lot of room to work with. >> and this becomes a negotiation. >> it does. >> like everything. >> like everything, so what you really need to do is figure out what she's willing to do -- a good place to go is virginmoney.com, and once you've negotiated the terms, it's a great way to formalize the loan if you're doing it with friends and family. >> next question. this is about a personal brand. >> i'm a consultant and a coach
among very qualified consultants and coaches. so how does one establish that unique value proposition to stand out? >> i love the pause. and? and? >> what a way to stand out from the crowd. there are a lot of entrepreneurs you see now that are sort of in the business. it can be a good thing, but it is sort of hard to stand out. i would go with word of mouth. that's guide way to establish a grassroots buzz and establish yourself among clients and potential clients. >> she can't just say i'm a life coach. specialize in something. specialize in moms returning to work, specialize in moms that are older people. it's easier if you concentrate on a smaller community. >> sierra writes in saying,
without much capital to hire full-time employees, what is the best way to brand a name, a logo and promote effectively? are there any chances for volunteer work or to maybe get a few interns? >> we get this question about interns all the time. it is illegal in many cases to hire interns and not pay them. there are very strict rules of who you can have with you and not pay them. >> in california, it is completely illegal. you need to pay interns minimum wage or you will not only get popped for it but it's going to cost you a lot of money in penalties. >> or school credit. >> yeah, school credit. >> despite the fact we all probably had unpaid internships. i think it's a great way for a start-up when you're stretching resources, you have people so young and eager to get out there and help, and they want to go
somewhere where they have more responsibility. >> craigslist is a great way to find interns. start with local colleges. these are the people who know who is doing what, where they can place them in specifically marketing departments. >> let's move on to the next one. this is from brian. he writes, i have an at-home catalog distribution business and i'm wondering if ilts a good idea to partner up with a charity to donate a portion of the net proceeds to them. obviously, this is close to my heart because i have a company that gives to charity. >> why? i mean, make sure that the charity is relevant, otherwise it looks like you're just doing it to get people to do business with you. so there has to be some kind of relevant connections there and, you know, the net is always like the hold hollywood net deals
where there is never any more money to donate. i'm always skeptical, so prove it to me or i'm not going to do business with you at all. >> i talked to a lot of entrepreneur, actually recently, about what role should charity play in your business, and a lot of people said the worst thing you can do is either do it as a pr stunt or at least it appears like a pr stunt, so if you start saying 50%, all of a sudden people start thinking, are they really committed to this or just getting free press out of it. it sounded a little built high and maybe not the best way to bring people into the fold. >> i agree. you have to think about what does it mean to your business? is it at the core of your business? is it something you want to keep private because it's something you want you and your employees to be involved in? and does it make sense?
>> every month we give $100 to a non-profit organization. my dad has alzheimer's and we've been giving $100 to alzheimer's. but it's not a big deal. it's just something we do and we don't ask you to do business because of this. >> if you have questions for the experts, all you have to do is go to the web site. it's openforum.com/your business. or e-mail us your questions or comments. that address is firstname.lastname@example.org. let's get some survival tips from entrepreneurs just like you. >> my advice would be try not to grow your early stage company too quickly. one of the nice things about the way the company was not to have a lot of influx kacapital reall
allowed our team to be able to think through our business plan and think through all the different scenarios so when we were in the position that capital was available to us, we knew what the plan was. >> the one piece of advice that i would like to say is ask for help. i would not be doing what i'm doing, i wouldn't be sitting in this chair if i hadn't learned early on to ask people for help. my network of help and my board of advisers and the people who have pushed me along the way have just been extraordinary. keeping track of all of your company's paperwork can be a daunting task, but there are ways to get help. check out our web site of the week. cashew.com provides simple accounting service. they can put your bank statements in one place. it also automatically backs up
your data and allows for secure remote access. for more on today's show click on our web site. it is openforum.com/yourbusiness. you'll find more information on helping your business grow. don't forget to become a fan of the show on facebook. we look forward to getting some of your feedback. you can also follow us on twitter. next week the owners of a new clothing company take their wares on the road. >> west hampton, east hampton, south hampton, we'll be in martha's vineyard, newport, connecticut. >> pounding the pavement to get the word out. till then, i'm j.j. ramburg, and remember, we make your business our business.